Previous Story
Frontera Energy Sells Interest in Petroelectrica de los Llanos for $56 Million USD
Posted OnOctober 28, 2017
Comment: Off
Tag: Campo Quifa, Campo Rubiales, canada, commodities, extraction, Frontera Energy, Frontera Energy Corporation, Gabriel De Alba, international finance corporation, Natural Resources, oil, Oleoducto Bicentenario de Colombia, Oleoducto Bicentenario de Colombia S.A.S, Oleoducto de los Llanos, Oleoducto de los Llanos Orientales, Oleoducto de los Llanos Orientales S.A., pacific exploration, Pacific Exploration & Production Corp., Pacific Midstream Limited, PACIFIC RUBIALES, Petroelectrica de los Llanos, quifa, Quifa Oilfield, rubiales, Rubiales Oilfield, toronto
Frontera Energy Corporation (TSX: FEC) has signed an agreement to sell its interest in Petroelectrica de los Llanos for $56 million USD to fund its acquisition Pacific Midstream Limited. Eléctricas de Medellín – Ingeniería y S.A.S (EDEMSA) is the buyer in a cash deal for Frontera Energy’s shares of Petroelectica de los Llanos, which the Toronto-based oil company called a “non-core asset.”
Frontera Energy will primarily use the cash received from the sale as an initial payment in a previously announced agreement to acquire International Finance Corporation’s (IFC) shares in Pacific Midstream Limited. The deal to buy the 36.36%interest held by IFC, and related parties, was agreed to earlier this month for a total of $225 million USD and will give Frontera Energy full control over Pacific Midstream Limited.
According to the company, $50 million USD of the incoming $56 million USD in proceeds will be used in the first payment to IFC. Frontera has up to 36 months to pay off the full sum, plus accrued interest.
Gabriel de Alba, chairman of Frontera Energy, which was previously known as Pacific Rubiales, called the move to fully acquire Pacific Midstream a “very strategic acquisition” that will support the firm’s push “to reduce our corporate transportation costs, provide long-term transportation flexibility, and reduce fixed-cost transportation obligations.”
He says both deals align with the company’s ongoing strategy to sell off non-core assets in favor of “more strategic initiatives while maintaining a strong cash position on our balance sheet.”
In the past 12 months, Frontera Energy has now secured nearly $150 million USD in cash from asset sales. These sales, according to the company, have also resulted in a roughly $147 million USD “reduction in exploration or environmental commitments” and the elimination of around $52 million in “stand-by letters of credit commitments.”
A key asset of Petroelectrica de los Llanos is its 260-kilometer power transmission line, with 192 megawatts of authorized electricity demand, that supplies power to the both the Rubiales and Quifa oil fields as well as the Oleoducto de los Llanos pipeline.
Share your thoughts:
